Virgin Media signs up to Sky AdSmart as rivals unite on addressable TV

Advertisers will be able to use Sky's AdSmart to target Virgin Media's TV viewers after the rival platforms agreed a long-anticipated deal.

Sky and Virgin Media claim they will offer a potential addressable audience of up to 30 million people in Britain and Ireland, giving advertisers the same reach as "leading social networks".

Virgin Media’s decision to sign up to AdSmart is significant because ITV and Channel 4 have, so far, failed to agree terms with Sky’s TV ad-targeting service.

AdSmart allows highly targeted ads by demographic and location and is credited with bringing new advertisers to TV.

Jamie West, Sky’s group director of advanced advertising, hailed the Sky-Virgin collaboration, saying: "In the past, broadcasters have tended to work in isolation. This will make advertisers' lives easier."

Virgin Media does not own channels in the UK. Instead, it airs channels from other broadcasters, although it owns TV3 in Ireland.

Sky’s sales house, Sky Media, sells air-time for a number of broadcasters in the UK, including Viacom. It is on these channels, plus TV3, that advertisers will be able to target on the Virgin Media platform – on both linear TV and video on demand.

Sky and Virgin Media will share revenue, based on ad impressions served on Virgin Media's platform.

Tom Mockridge, chief executive of Virgin Media, said: "We’re giving consumers advertising that is more relevant to them and giving brands a trusted destination to deliver intelligent, tailored TV campaigns to a targeted audience."

Pat Kiely, Virgin Media Solutions executive lead and managing director of TV3, added that Virgin Media was keen to appeal more to advertisers following parent company Liberty Global's acquisition of TV3, which has about one-third of commercial TV impacts in Ireland.

"We've got a foot in both camps," Kiely added, explaining Virgin Media's involvement in both free-to-air and pay-TV. "This deal [with AdSmart] gives us meaningful scale so we can enhance our proposition for advertisers and agencies in the UK."

Andrew Griffith, Sky's chief operating officer, who oversees Sky Media, said: "Addressable TV is the high quality, brand safe and transparent medium that leading brands have already been adopting in their thousands.

"Today’s partnership takes that to the next level with the extension of AdSmart to millions more homes meaning more relevant ads for Virgin customers and a larger platform for advertisers."

Sky's West said the 30 million audience is based on Sky's 11 million connected homes and Virgin's 3.7 million TV subscribers, with roughly 2.3 people per household.

The linear TV ad market has fallen in the UK in the 12 months since the Brexit vote, raising fears of a structural shift in viewing habits to on-demand services, but West played down any suggestion that this was driving adoption of Sky AdSmart.

Instead, he said "the onus" is on TV platforms to innovate in an "increasingly competitive" media marketplace. "We'd have done this if the market was up 10%" in the last year, West said.

But in a thinly veiled swipe at YouTube and Facebook, he added that advertisers have a choice: "Do you want to go for a non-transparent trading solution or addressable advertising in a brand-safe, transparent environment in the most effective medium for delivering ROI?"

West said he hoped ITV and Channel 4 would consider joining AdSmart: "We're open to welcoming more channels."